Tuesday, April 15, 2003

Neighbor island
home sales keep up

The biggest drain on the market,
real estate agents say, is a lack of
properties being placed for sale

By Lyn Danninger

Home sales on the neighbor islands remained strong in March with prices and volume continuing to increase in just about all categories.

On the Big Island, 158 single-family homes and 72 condominiums sold last month, slightly more than the number of sales a year earlier.

Single-family home prices moved up to a median price of $261,250, an increase of 37.5 percent from March 2002.

While the number of condominium sales increased by 5.9 percent, prices were down 2.4 percent to a median of $155,000.

Big Island Realtor Gary Davis, broker-in-charge at Clark Realty in Kamuela, said the challenge continues to be a lack of homes on the market -- especially in some areas.

"Hilo has probably the lowest inventory it has ever had," Davis said.

Moreover, Clark said there is very little in the way of residential subdivisions being built in the area, although some agricultural land formerly belonging to C. Brewer and Co. is being divided up into larger parcels.

"What's happening is that some of the C. Brewer property sold in the last five years is starting to be subdivided into bigger agricultural estates of around five or six acres," he said.

On Kauai, a lack of medium-priced housing continues to be a problem, said Lee Morey, broker in charge at Century 21 All Islands Koloa office. The median price for single-family homes and condominiums on Kauai both increased in March with home prices rising 43 percent to a median of $384,500 and the median for a condominium moving upward by 23.3 percent to $270,735.

The number of single-family home sales increased to 52 last month, while the number of condos sold slipped a bit. Morey said the decrease in number of condominium sales could well be related to investors not seeing the kind of margins needed for rental properties in resort areas. The lack of inventory, combined with escalating prices may be enough to slow down those types of investments, she said.

"Even investors are having a hard time. You want some income to cover the mortgage, but you can't get enough cash flow unless you are looking toward the future," she said.

Moreover, it will be a few more years until Kukuiula, the joint development on the South Shore between Alexander & Baldwin Inc. and DMB Associates will be completed. The plan for the development is now to build a maximum of 1,500 dwelling units, but that number includes some hotel rooms and timeshares.

Lack of water is the major issue stopping further development and is putting pressure on existing home prices, Morey said.

"You're not going to see a whole lot of development in the area, so not much can be done until the issue of water is settled," Morey said.

On Maui, while the number of single-family home sales stayed at the same level, prices edged up 7.5 percent to a median of $430,000.

For condominiums, the number of sales increased to 131 last month from 116 recorded in March 2002.

However, prices decreased slightly to a median of $220,000, down 11.5 percent over March 2002's median of $238,000.

The price for single-family homes in just about all neighborhoods continued to show increases, with the exception of central Maui where the median price of a single family home in March decreased slightly to $293,250 from $300,000 a year earlier.

Keoni Ball, broker in charge at Carol Ball and Associates in Central Maui, said a new gated community, called The Bluffs, means 38 additional housing lots for the area.

Prices for the land range from around $265,000 to $309,000, he said.

"That's just the price of the land alone, so you will see prices come up in central Maui," he said.

There is one affordable housing project coming up for the central Maui area, Ball said.

"It's scheduled to break ground soon so that should create some more affordable inventory in the area," he said.

Meanwhile, prices in other areas on Maui, such as the sought-after resort areas of Lahaina, Kaanapali, Napili and Wailea/Makena, continue to higher prices than a year ago.

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